BATCH 2023-24

CHAPTER 11: MARKETING

Prepared By: Commerce Department, DPSN

Topics covered:

MARKET`

MARK ET
Traditionally the term ‘market’ refers to a place where the buyer and seller gather to enter into transactions involving
exchange of goods and services. The other ways in which this term is being used is in context of
[a]a product market (cotton market, gold or share marker);]
[b]geographic market (national and international market);
[c]types of buyers (consumer and industrial market) and
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[d]the quantity of goods transacted( retail market and wholesale market).

In modern terms, market refers to a set of actual and potential buyers of a product or service. For example; when a
fashion designer designs a new dress and offers it for exchange, all the people who are willing to buy and offer some
value for it, can be consider as the market for that dress.

MARKETER
It refers to any person who takes more active part in the process of exchange. Normally, it is the seller who
is moreactive in the process of exchange as he analyses the needs of the potential buyers, develops a
market offering and persuade the buyers to buy the product. However, there may be certain situations
where the buyer may take an active part in the process of marketing. For example; in situations of rare
supply, the buyer may be taking extra efforts in persuading the seller to sell the product to him. In that
case, the buyer may be treated as the marketer.
Thus, anybody, who takes more active role in exchange process will be taken as the marketer

MARKETING

Traditionally, marketing has been referred to as performance of business activities that direct the flow
of goodsand services from producers to consumers.
In modern times, marketing is described as a social process whereby people exchange goods and
services for money or for something of value to them . According to Phillip Kotler, “Marketing is a
social process by which individual groups obtain what they need and want through creating offerings
and freely exchanging product and services of value with others.”

FEATURES OF MARKETING

1. Needs and wants – A need is a state of felt deprivation or feeling of being deprived of
something. If a need is left unsatisfied, it leaves a person unsatisfied and unhappy. On the other
hand, wants are culturally defined objects that are potential satisfiers of needs. In other words,
wants are the human needs influenced by various factors like; culture, personality, religion etc.

Need-Travelling
Want-Travel in Benz
car
2. Creating a market offering – It
refers to a complete offer for a
product or service, having given
features like size, taste etc. a
good market offer is the one
which is developed after
analyzing the needs and
preferences of the potential
buyers.
3. Customer value – Customer is ready to give
a price for the product only when he gets
satisfaction or only when the product is
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 offering utilities matching to the price. Marketer must add value to the product so that
customers prefer their product over the competitor’s product.

4. Exchange mechanism – Exchange refers to the process through which two or more parties
come togetherto obtain the desired product or service from someone, offering the same, by
giving something in return. In the modern world, goods are produced at different places and
are distributed over a wide geographical area through various middlemen, involving
exchanges at different levels of distribution Therefore, it is the essence of the marketing.

Conditions for exchange

mechanism are
 Involvement of at least two
parties – buyers and sellers
 Each party should be able of
offering, something of value to
the other. For example; seller offers productand buyer offers money.
 Both the parties are free to accept or reject the offer
 Each party should have the ability to communicate and deliver the product or service.
 The parties should be willing to enter into transactions with each other.

WHAT CAN BE MARKETED ?

PRODUCT- It is bundle of utilities or a source of satisfaction of human needs and wants. It refers to
anything that can be offered to the customer for their uses. In the marketing literature , anything that can be
of value to the buyer can be termed as a product. It can be tangible i.e. which can be felt, seen and touched
physically such as pencil , a cycle or an intangible such as services rendered by a doctor, hairdresser or a
lawyer. Apart from the product the other things that can be marketed are:
 Physical products- DVD players, Motor cycles etc.
 Services – Insurance, health care, Easy bill service etc.
 Ideas- Polio Vaccination, Help age, Donation of Blood etc.
 Person – For election of candidates for certain posts.
 Experience – Customized experience as Dinner with a celebrity, experience of
balloon riding, mountaineering etc.
 Place – ‘Visit Agra- The City of Love’ ; ‘Mysore- The City of Gardens ‘ etc.
 Properties - Intangible rights of ownership of real estate in financial property ( shares,
debentures)
 Events – Sports events, Music concerts, Fashion shows etc.
 Information – Research information, technological information etc.

MARKETING MANAGEMENT
It refers to the planning, organizing, directing and control of the activities which facilitates exchange of
goods and services between producers and consumers or users of goods and services. According to
PhilipKotler, “Marketing management is the art and science of choosing target markets and getting,
keeping andgrowing customers through creating, delivering and communicating superior customer’s
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values of management.”
From the above definition, the process of marketing management involves the following steps-

1. Choosing a target market, for example a manager may choose to sell readymade garments for
children up to age of 5 years.
2. The next step is to focus on getting, keeping as well as growing customers. In other words,
marketer has to create demand for his product, keep them satisfied with firm’s product and also
attract more customers to the firm’s product so that the firm can grow.
3. The last step in the process is to create superior values among the customers so that the customers
are attracted to the product and communicate the same values to the other potential buyers. It implies to
create such special features in company’s product as may enable the company to surpass of competitor’s
product.
For example, a company offering two years’ free service on electronic products.
Marketing Management generally is related to creation of demand, However, in certain situations, the
manager has to restrict the demand. For example, if there is a situation of overfull demand i.e. the
demand being more than what the company can or want to handle. The job of marketing manager , in
these situations would be to find ways to reduce the demand temporarily by say reducing the
expenditure on promotion or increasing the prices.

FUNCTIONS OF MARKETING
1. Gathering and analyzing the market information- The marketing begins with the research
conducted by the marketer. The research is conducted to find out the needs of the customers.
On the basis of this research, the product, its label, its brand name etc. is designed. Research is
important for making analysis of opportunities and threats, strength and weaknesses of the
organization.
2. Market planning – After conducting research, the marketer has to develop appropriate
marketing plans so that the marketing objectives of the organization can be achieved. For
example; a marketer of colour television, having 10% of the current market share in the
country aims at enhancing his market share to 20%in the next three years. He will have to
develop a complete marketing plan for that.

3. Product designing and development- The design of the product contributes to making the
product attractive to the target customers. A good design can improve performance of a
product and also give it a competitive advantage in the market. It includes decisions like;
shape, style, colour of the product etc.

4. Standardization and Grading- Standardisation refers to producing goods of predetermined

specifications, which helps in achieving uniformity and consistency in the output.
Standardisation ensures the buyers that goods conform to the predetermined standards of
quality, price and packaging and reduces the need for inspection, testing and evaluation of
the products. Grading, on the other hand, is the process of classification of products into
different groups on the basis of some of its important characteristics like quality, size etc. It
is particularlynecessary for products which are not produced according to pre determined
standards like agricultural product – wheat, oranges etc.
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 5. Packaging and Labeling- Packaging is a set of decisions which are concerned with the
designing an appropriate package for the product. It not only protects the product but also
serve as promotional tool. It acts as a silent salesman. Labeling refers to designing the label
to be put on the package which gives information about the product, price, expiry date etc.

6. Branding- It involves a set of decisions which are concerned with the designing an
appropriate name of theproduct. The brand name must be selected very carefully.

7. Customer support services- It refers to after sale services, handling customer grievances,
maintenance services etc. they prove very effective in bringing repeat sales from the
customers and developing brand loyalty for a product.

8. Pricing of a product- Price of the product refers to the money which customers have to
pay to buy a product. It is an important factor affecting the success and failure of a product
in the market. The demand for the product is inversely related to its price.

9. Promotion- It involves informing the customers about the firm’s product, its features etc.
and persuading them to purchase their product. The four important tools of promotion are –
advertising, personal selling, sales promotion and public relation activities.

10. Physical distribution- It includes two major decisions-

A) Channels of distribution of the marketing intermediaries ( like wholesalers, retailers etc)
B) Physical movements of product from where it is produced to a place where it is consumed

11. Transportation- There is a gap between production and consumption. To cover this gap
the marketer makes use of various modes of transport. A marketing firm has to analyse
its transportation needs after considering factors like nature of product, cost and location
of target market.

12. Storage or Warehousing- There is time gap between production of goods and their sales. It
is necessary to keep the goods safe and prevent them against spoilage, theft in this gap. Thus,
there is a need for storage of adequate stock of goods to protect against unavoidable delays in
delivery or meet contingencies in demand.

MARKETING PHILOSOPHIES

The philosophy or the concept to be adopted is important as it determines the emphasis or the weightage
to be put on different factors, in achieving the organizational objectives.
For example, whether the marketing efforts of an organization will focus on the product- say designing
its features etc or on selling techniques or on customer’s needs or the social concerns.

1. PRODUCTION CONCEPT -
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 According to this concept, profits can be maximized by producing at largescale, thereby reducing the
average cost of production. It was assumed that consumer would prefer those products which are
widely available at affordable price. Thus, availability and affordability were the key words for the
success to a firm. The major drawback of this concept was that mere affordability and availability of
the product could not ensured increase in sales.

2. PRODUCT CONCEPT- According to this concept, the business goals could be realized when the
products of high quality are produced.
Therefore, the emphasis of the firms was
shifted from quantity to quality of
products. Thus, product improvement
became the key for profit maximization
of a firm. However, product quality and
availability did not ensure the survival
and growth of the firm because of large number of sellers selling the qualityproduct.

3. SELLING CONCEPT- This concept is based on the adoption of aggressive selling and promotional
efforts because of consumers’ buying inertia and resistance. The assumption is that if the consumer is left
alone, he would not buy or not buy enough unless they are motivated to do so. The firm must put its
products through aggressive selling and promotional efforts. However, buyers can’t be manipulated every
time, therefore this strategy is good only in short term.

4. MARKETING CONCEPT- It implies that focus on satisfaction of consumer’s needs is the key to
the successof business firm. It assumes that in the long run an organization can achieve its objectives of
maximization of profits by identifying the needs of its present and prospective buyers. The firms don’t
sell what they can make; rather they make what they can sell.

The following are the pillars of marketing concept

 Identification of market or consumers who are chosen as the target of marketing efforts.
 Understanding needs and wants of consumers in the target market.
 Development of products or services for satisfying needs of the target market.
 Satisfying the needs of target market better then the consumers.
 Doing all this at profit.

5. SOCIETAL /SOCIETAL MARKETING

CONCEPT- The critics of the marketing
concept argue that blindly following the goal of
identifying customers’ needs and satisfying them has
led to some social and environmental problems such
as pollution, wastage of natural resources etc. In other
words, marketing should also enhance social well
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 being. Thus, the business firms need to be concerned about the ecological and ethical aspect of marketing.Social
objectives must be given due importance.

DIFFERENCES IN MARKETING MANAGEMENT PHILOSOPHIES

Philosophies/ Production Product Selling Marketing Societal

concept
Basis Concept Concept Concept Concept

Starting point Factory Factory Factory Market Market and

society

Main focus Quantity of Quality, Existing Customer Customer

product performance, product needs needs and
features of society’s
product well being

Means Availability and Product Selling and Integrated Integrated

affordability of improvements promoting marketing marketing
products

Ends Profits through Profit through Profit Profit through

Profit
volume of product quality through sales customer
through
production volume satisfaction
customer
satisfaction
and social
welfare
 REFER TO GREY BOX –where do companies do their business ,future of global brands.

Test your Understanding:

State whether the following statements are True or false:
a. Focus of Marketing activities is on facilitating exchange of goods and services from producers to
consumers orusers.
b. In Modern Marketing, the term market refers to the place where buyers and sellers meet for
the exchange ofgoods and services.
c. Marketing is same thing as shopping for goods and services.
d. Marketing is a post production activity only.
e. Marketing is equally relevant to Non- profit- organization.
f. The term need and want are used interchangeably in the marketing literature.

MARKETING MIX

According to William J. Stanton, “ Marketing mix is the term used to describe the combination of the
four inputswhich constitute the core of a company’s marketing system, the product, the price, the

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promotional activities and distribution system.” There are large numbers of factors affecting marketing
decisions. These are broadly divided into two categories:

a) Controllable factors- These are the factors which can be influenced at the level of the firm.
For example;deciding upon the brand name of the product, fixing up of price of the product
etc.

b) Uncontrollable factors – These are the factors which affect the decision but are not
controllable at the firm’s level. For example; Government policy relating to technical and
financial collaboration in the area ofsoft drinks etc.

According to E.J. Mc. Carthy, there are four major elements of marketing mix:
a) Product mix
b) Price mix
c) Place mix
d) Promotion mix

PRODUCT MIX

A product may be defined as

anything that can be offered to a
market to satisfy a want or need. It is offered for attention, acquisition, use or consumption.

Product Mix refers to important decisions related to the product such as quality of the product,
design of the product, package of the product, branding, and labeling of the product. A product is
considered as a bundle ofutilities as it provides following benefits to the customers:
a) Functional benefits- The fundamental or the basic benefit that the consumer seeks in the
product or service which he buys. It provides functional utility. For example, the core benefit
offered by a car is transportation facility
b) Psychological benefits – The second level of the benefit is the expectation of the customer,
i.e. what customer expects in the product or service which he is buying. For example, a
customer expects the car to be comfortable in driving, good shape and style etc. it satisfies
the need for prestige and esteem.
c) Social Benefits- It provides social benefit by the way, the purchase of a motorcycle provides
functional utility of transportation, but at the same time satisfies the need for prestige and
esteem and provides social benefit by the way of acceptance from a group by riding a
motorbike. Thus all these aspects should be considered while planning for a product. of
acceptance from by riding motorbike.
LET US DO IT
Enlist the functional, psychological and social benefits that can be achieved by the purchase of
a. Personal Computer
b. colour television
c. wrist watch

A product mix involves the following decisions:

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  Branding- Generic name refers to the name of the whole class of a product. For example, a
book, a wrist watch, tyre etc. The process of giving name or sign, or symbol etc to a product
which helps in identifying and in distinguishing the product from that of its competitors’
product. is called branding. It consist of

1. Brand: A brand is a name, term, sign, symbol, design or some combination of them, used
to identify the products— goods or services of one seller or group of sellers and to
differentiate them from those of the competitors. For example, some of the common brands
are Bata, Lifebuoy, Dunlop, and Parker. Brand is a comprehensive term, which has two
components—brand name and brand mark.
2. Brand name- That part of the brand which can be spoken is called a brand name. In other
words, it is the verbal component of the brand. EG : AirIndia
3. Brand mark- That part of brand which can be recognized but which cannot be spoken is
called brand mark. It appears in the form of symbol, design, colour etc. Maharaja sign Of
Air India.
4.Trade mark- A brand or part of brand that is given legal protection is called trademark. In
this case, no other firm can use such brand name or mark.

Characteristics of a good brand name

• The brand name should be short and easy to pronounce eg.,
Ponds, Vim
• A brand name should be suggestive and should tell about the
product’s benefits or qualities. e.g. Boost, Genteel
• It should be distinctive e.g.,Liril, Zodiac
• It should be adaptable to packaging or labeling requirements.
• It should be versatile e.g., Maggi, Coalgate
• It should be capable of being registered and protected legally.
• Chosen name should have staying power i.e., it should not get
out of date.

Packaging- It refers to a set of activities which are concerned with the design and
production ofappropriate package or wrapper for a product. For example, Dettol
liquid comes in a package that facilitates easy pressing of the top portion by thumb
and ultimate release of liquid

How package is different from packaging?

Package is the wrapper in which product is wrapped while packaging refers to a set of activities which

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are concerned with the design and production of appropriate package or wrapper for a product.

Levels of packaging
a) Primary packaging- It refers to the product’s immediate container. For example, toothpastetube,
match box tec.

b) Secondary packaging- It refers to additional layers of protection that are kept till the product is ready
to use. For example, a tube of shaving cream usually comes in a cardboard box which is disposed off
as the consumer starts using the product.

c) Transportation packaging- It refers to further packaging components necessary for storage,

identification or transportation. For example, corrugated boxes may be used to transport
Kurkure, Lays etc.

 REFER TO PICTURE OF LEVELS OF PACKAGING IN NCERT

Importance of packaging
a) Rising standard of health and sanitation- Packaging has become essential because of
rising standard of health and sanitation. In a packed good there are less chances of
contamination of products. People prefer packed products over loose products as there are
less chances of adulteration in a packed food.

b) Self service outlet- The self service retail outlets are becoming popular day by day. In
these stores theproducts are generally wrapped in attractive packing which could be
picked up by buyers easily.

c) Innovational opportunities- Recent development in packaging have completely changed

the marketing. For example, new packing in soft drinks, chips, biscuits keeps them fresh for
a longer period of time. Even milk can be stored for 4-5 days without refrigeration.

d) Product differentiation- Packing helps the consumers to differentiate between goods

on the basis ofquality as with the type of packing, customer can guess about the quality
of the goods.

Functions of packaging
a) Product identification- Packaging greatly helps in identification of the products. For
example, with the yellow and black packing and alphabet K we can recognise from far off
that it is a Kodak product.

b) Product protection- The fundamental function of packaging is that it protects the product
from damage. Appropriate packaging protects the product from sun, rains, moisture,
breakage etc. for example, Air tight containers and packets are used for chips, biscuits etc
which needs protection from atmospheric contacts.

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 c) Facilitating use of product- The size and shape of the package should be such that it
should be convenient to open, handle and use for the consumers. It also makes it
convenient to store and shift the product from one place to another. For example, new pet
bottles of cold drink have made it very easy for middlemen to transport it, supply it and
store it.

d) Product promotion- Packaging plays a significant role of silent salesman because it

promotes or enhances the sale of the product. The attractive colourful and innovative
packing attracts the customersespecially if the product is children’s product.

Labeling
It refers to
designing the label
to be put on the
package which
gives information
about the product,
price, expirydate
etc.

Functions of labeling

a) Describe the product and specify its contents- The manufacturer cannot communicate everything
personally to each and every customer. So, if he wants to share some informationabout the product
with customer it can be done easily through labeling.

b) Identification of the product or brand- The other important function performed by labels is to help in
identifying the product or brand. For example, we can identify a Cadbury chocolate from the various
chocolates kept in the shelf of a shop by its colour, shape etc.

c) Grading of a product- Sometimes marketer assign different grades to indicate different featuresor
quality of a product. For example, a popular brand of hair shampoo is sold under different labels for
different types of hair like; normal hair, oily hair etc.
d) Helps in promotion of product- Labels play important role in sales promotional schemes launched by
companies. For example, a package of toothpaste mentioning free toothbrush inside.
e) Providing information required by law- The label is also used to fulfill the legal requirementsas it is
legal compulsion to print batch no. , retail price etc On some products giving statutory warning is also a
legal compulsion and these legal requirements are fulfilled through label.

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  REFER TO GREY BOX indicating pepsi co acquisitions and marketing of services

LET US DO IT

Examine the label on the package of any three branded products recently purchased for use in your
family and list out the type of information contained on those.

Price mix
Price may be defined as the amount of
money paid by a buyer (or received by a
seller) in consideration of the purchase of a
product or a service. Pricing involves
determination of the price of the product
which is the most crucial decision for the
firms.

Factors affecting price determination

1. Product cost: It includes the total cost of producing, distributing and selling the product. Total cost
includesthree types of cost- Fixed Costs, Variable Costs and Semi Variable Costs. The cost sets the
minimum level or the floor price at which the product may be sold..
Fixed cost is the cost which does not change with the level of output like rent, salary, insurance.
Variable cost is the cost which varies directly with level of output, like; payment for raw materials,
wages, power etc.
Semi Variable cost is the cost which varies with output level, but not in direct proportion. Some
proportionis fixed and some varies with output.

Generally, all the firms set a price which covers the total cost and reasonable profit.

2. The utility and demand: The utility provided by a product and the intensity of demand of the
buyers set the upper limit of the price. The buyer may be ready to pay the price up to the point where
the utility fromthe product is at least equal to the sacrifice made in terms of price paid. The price is
also affected by the price elasticity of demand. In case of inelastic demand, firm can charge higher
price. However, for the products with elastic demand, a slight rise in the price adversely affects the
demand.

3. Extent of competition in the market: Price of a product cannot be fixed without considering the
competitor’s price. If the firm does not face any competition, then it enjoys complete freedom in
fixing theprice. However, in case of severe competition, the firm has to consider the price, quality
and features of competitors’ product.
4. Government and legal regulations: Government can intervene and regulate the price of
commodities. It can declare a product as essential product and regulate its price. For eg., the cost of
essential commodities may be fixed by Government.

5. Pricing objectives: The pricing objectives of the firm also influences the price of a product. Profit
maximization is one of the main pricing objective .If the firms aims to maximize profits in the short
run, then it would fix high price for its products. However, if the profits are to be maximized in the

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 long run, then low price is fixed to capture larger market share and earn greater profits through
increased sales. Apartfrom profit maximization, the pricing objectives of firm may include:
 Obtaining market share leadership: If the firms aim to capture larger market share, then it will
fix lowprice to attract large number of people. For example; Reliance is able to capture large
share in Mobile services due to its low price policy.
 Surviving in a Competitive market: If a firm faces difficulties to survive in the competitive market,
then it may offer discount on its products or may use other promotional methods to clear its stock.
 Attaining product quality leadership: If the firm aims to obtain leadership in quality product,
then firmnormally charges higher prices to cover higher cost of research and development.

6. Marketing Methods Used: Price fixation is also affected by marketing methods

used, such as distribution system, quality of salesmen employed, degree of
advertising, salespromotion efforts etc.

PLACE MIX
PHYSICAL DISTRIBUTION/PLACE-MIX

PHYSICAL DISTRIBUTION is concerned with making the

goods and services available at the right place, so that people can
purchase the same.

Place-mix involves two important decisions:

a) Physical movement of goods from producers to consumers and

b) Channels of distribution of goods

CHANNELS OF DISTRIBUTION

Channels of distribution refer to a team of merchants, agents, wholesalers, retailers etc. Channels of distribution
smoothen the flow of goods by creating possession, place and time utilities.

TYPES OF CHANNELS OF
DISTRIBUTION

 DIRECT CHANNEL (ZERO

LEVEL) - When the goods are
directly sold by the
manufacturers to the customers
without using any intermediary it
is called zero level channel .eg
mail order selling ,internet selling
, selling through own sales force
(EUREKA FORBES)

 INDIRECT CHANNELS - When a manufacture employs one or more intermediaries to move goods , such
a distribution network is called indirect

TYPES OF INDIRECT CHANNELS OF DISTRIBUTION

1. MANUFACTURERS- RETAILERS –CONSUMER(ONE LEVEL CHANNEL)

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 When the manufacturer sells goods to the retailers who in turn sells it to the customers ,it is called one level
channel .eg MARUTI sells cars through company approved retailers.

2. MANUFACTURERS – WHOLESALERS –RETAILERS-CUSTOMERS (TWO LEVEL CHANNEL)

When the manufacturer sells goods to the wholesalers in bulk who sells in small quantities to the retailers
who supply to the customers. ,it is called two level channel .eg For soaps , oils , clothes, rice this
distribution network is preferred.

3. MANUFACTURERS-AGENT-WHOLESALERS-RETAILERS-CUSTOMERS(THREE LEVEL
CHANNEL)

In this method manufacturer use their own selling agents who connect them with wholesalers and then the
retailers. This method is preferred when large market is to be covered.

PHYSICAL DISTRIBUTION OF GOODS

PHYSICAL DISTRIBUTION OF GOODS means physical handling and movement of goods from place of
production to place of consumption. It is also called as logistics management

COMPONENTS /DECISIONS RELATED TO PHYSICAL DISTRIBUTION

The main components of physical distribution are explained as follows:
1. Order Processing: Products flow from manufacturers to customers via channel members while orders
flow in the reverse direction, from customer to the manufacturers. A good physical distribution
system should provide for an accurate and speedy processing of orders, in the absence of which
goods would reach the customers late in wrong quantity or specifications.

2. Transportation: Transportation is the means of carrying goods and raw materials from the point of
production to the point of sale. It is important because unless the goods are physically made available, the sale
cannot be completed.

3. Warehousing: Warehousing refers to the act of storing and assorting products in order to create time utility in
them. The basic purpose of warehousing activities is to arrange placement of goods and provide facilities to
store them. Generally more the number of warehouses a firm has, lesser would be the time taken in serving
customers at different locations but greater would be the cost of warehousing and vice-versa. Thus the firm
has to strike a balance between the cost of warehousing and the level of customer service. For products
requiring long- term storage (such as agricultural products) the warehouses are located near production sites.
On the other hand, the products which are bulky and hard to ship (machinery, automobiles) as well as
perishable products ( bakery, meat, vegetables) are kept at different locations near the market.

4. Inventory Control: A very important decision in respect of inventory is deciding about the level of inventory.
Higher the level of inventory, higher will be the level of service to customers but the cost of carrying the
inventory will also be high. Thus a balance is to be maintained in respect of the cost and customer satisfaction.
The decision regarding level of inventory
involves prediction about the demand for
the product. A correct estimate of the
demand helps to hold inventory and cost
level down to a minimum.

PROMOTION MIX
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Promotion refers to the use of communication with twin objective of informing potential
customers about aproduct and persuading them to buy it.

Promotion Mix: Promotion mix refers to combination of promotional tools used by an organisation to
achieve its communication objectives. The important decisions of promotion-mix are selecting advertising
media, selecting promotional technique, using publicity measures and public relations.

ADVERTISING

It is an impersonal form of communication, which is paid for by the marketers (sponsors) to promote
goods orservices. According to American Marketing Association, advertising is “any paid form of non
personal presentation and promotion of ideas , goods
and services by an identified sponsor.”

FEATURES

1. PAID FORM: Advertising is paid form

of communication and hence commercial
in nature. The sponsorshave to bear the cost of communicating with the prospective buyers.

2. IMPERSONALITY: Advertising is an impersonal method of promotion as there is no

direct face to facecontact between the customer and advertiser. It creates a monologue and
not a dialogue.

3. IDENTIFIED SPONSOR: Advertising is undertaken by some identified individual or

company. The nameor identity of the company is disclosed in the advertisement.

ADVANTAGES/MERITS/ ROLE OF ADVERTISING

1. MASS REACH: As a communication tool advertising enjoys the benefit of mass reach.
For e.g. one commercial aired through T.V. or All India radio can reach a very large
number of customers living indifferent parts of the country.

2. ENHANCING CUSTOMERS SATISFACTION AND CONFIDENCE: Advertising

increases confidence as customers feel more comfortable and assured about the quality of
the advertised product..

3. EXPRESSIVENESS: Advertising provides enough opportunities to dramatise message

with the help ofdrawings, colours, pictures, music etc.

4. ECONOMY: Advertising is considered economical as compared to other tools of

promotion as it reaches large number of customers. As a result cost per customer is very low.

5. HELPS IN INTRODUCTION OF NEW PRODUCTS: Advertising helps to provide to

provide of new products or brands. e.g. Advertisements of OLAY anti- aging products have
helped P&G earn huge profits.

6. HELPS IN EDCATING CONSUMERS AND MAKING SHOPPING EASIER:

Advertising helpsconsumers by informing them about the new products and new features
of the existing products.
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 7. GROWTH OF THE ECONOMY: Advertising leads to large scale production creating more
employment opportunities.

8. CREATES DEMAND: Advertising creates steady demand for the products of a

manufacturer. It arouses interest and creates a desire to purchase. It also creates new customers
and widen the market for the product.

9. DEVELOPS GOODWILL: Advertising helps in creating a good image of the firm and
reputation for its products. It enables manufacturers to secure repeated sales.Customers quickly
accept the new products of a reputed firm.
 REFER TO GREY BOX indicating celebrities influence on brands and Top five advertisers
PERSONAL SELLING

MEANING
It means face to face communication between a seller and buyer. It
involves oral presentation of message in the form of conversation
with one or more prospective customers for the purpose of making
sales. It involves two waycommunications.

FEATURES

1. PERSONAL FORM: It is direct face to face communication between seller and the buyer. It
leads to interactive discussion and personal contact between the two.

2. DEVELOPMENT OF RELATIONSHIP: It allows a salesperson to develop personal relationships

withthe prospective customers, which may become important in making sales.

3. ORAL CONVERSATION: It involves oral presentation of message in the form of conversation with
oneor more prospective customers for the purpose of making sales

4. NARROW COVERAGE: It has limited coverage as it involves contact with limited number of
targetgroup persons.

5. FLEXIBILITY: It is highly flexible as sales presentation can be adjusted to fit the specific
needs ofindividual customers.

MERITS
1. FLEXIBILITY: It is highly flexible as sales presentation can be adjusted to fit the specific
needs ofindividual customers

2. DIRECT FEEDBACK: In personal selling it is possible to take a direct feed back from the customer
and toadapt the presentation according to the needs of the prospects.

3. MINIMUM WASTAGE: There is minimum wastage of time and effort and as company pre decides
thetarget customers before making any contact with them.

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DIFFERENCE BETWEEN ADVERTISING AND PERSONAL SELLING

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SALES PROMOTION

MEANING
It refers to short- term incentives, which
are designed to encourage the buyers to
make immediate purchase of aproduct. It
includes offering cash discounts, free gift
offers, and free sample distribution etc.

MERITS OF SALES PROMOTION

1. ATTENTION VALUE: It creates attention value by offering

short-term incentives to customers. Whenever any new incentive
is offered to customers, they pay more attention to it.

2. USEFUL IN NEW PRODUCT LAUNCH: Promotional activities are

used to create interest in the newproduct and to persuade people to buy
the same.

3. SYNERGY IN TOTAL PROMOTIONAL EFFORTS: Sales

promotion activities supplement personalselling and advertising efforts of
the firm. They add to overall effectiveness of the firm’s promotional
activities.

LIMITATIONS OF SALES PROMOTION

1. REFLECTS CRISIS: Frequent use of sales promotion activities may give the impression that the
firm isunable to manage its sales or there are no takers of its product.

2. SPOILS PRODUCT IMAGE: Use of sales

promotion tools may affect the image of product.
The buyers may perceive that either the product is
not of good quality or is not appropriately priced.
PUBLIC RELATIONS
CONCEPT Public Relations include a variety of
programs to promote and protect the image of a
company and its products by creating and managing
successful relations with the public ,including
customers , suppliers , shareholders , government ,
wholesalers, retailers etc.
According to Public Association Relations , public
relation is define as “ The art and social science of
analyzing trends, predicting their consequences ,
counseling organizational leaders and implementing
planned program of action which will serve both the
organization and the public interest.”

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[Supplementary material]
DIFFERENCE BETWEEN MARKETING AND SELLING

Basis Marketing Selling

Marketing is a wider term consisting
of number of activities such as
identification of customer’s needs,
developing the products to satisfy
these needs, fixing prices, promoting
Scope the sale of product.
Marketing activities start before the
Start and end of product is produced and continue
activities even after product has been sold.
Profit through
maximizing Marketing activities are directed
sales vs towards maximizing customer
customer satisfaction and thereby increasing
satisfaction profits.
Different in the Developing the product as per the
Emphasis needs of the customers
It uses integrated marketing efforts
involving strategies of product,
Difference in promotion, pricing and physical
Strategies distribution
Selling is a part of marketing and
is concerned with promoting and
transferring possession and
ownership of goods from the seller
to the buyer.
Selling activities start after the
product has been developed.
Maximizing profits through
increase in sales volume.
Bending or molding the customer
as per the product.
It involves strategies like
promotion and persuasion for
selling the product.

QUALITIES OF GOOD SALESPERSON

1) PHYSICAL QUALITIES - A good salesperson should be good looking and must

have an alluringposture
2) MENTAL/PSYCHOLOGICAL QUALITIES:A good salesperson should be friendly and
patient listener 3) TECHNICAL QUALITIES: A good salesperson should have knowledge
about the firm as well as the firm
he is working for.
4) COMMUNICATION SKILLS: A good salesperson requires effective
communication skills. 5) PERSISTENT: Good salesperson is persistent. They never
give up until they finalize sale.
6) COURTESY:A salesperson must be very polite. Courtesy costs nothing but wins
a reputation7) HONESTY: He must be honest and sincere in informing his duties.
8) CAPACITY TO INSPIRE TRUST: He must have the quality to inspire trust

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 TEST YOUR KNOWLEDGE
1. Name the function of marketing that ensures that goods belong to a particular quality
and helps in realizing higher prices for high quality output.
2. Name the tool of marketing that helps to inform potential customer and persuade them to
buy it.
3. They facilitate the movement of goods and services by overcoming the various time ,
place and possession barriers.name the concept
4. Marketer aims to increase his market share from 10%to 20%. Name the marketing
function.
5. Name the concepts a)find wants and fill them b) create products and sell them
6. Under what conditions you would prefer to sell through indirect channels
7. Give one example of compulsory labeling by law.
8. Name the concept that helps to revive the lost image of the company

MULTIPLE CHOICE QUESTIONS

1. Marketing is a process which aims at:
(a) Production
(b) Profit making
(c) Satisfaction of customer needs
(d) Selling Products

2. Marketers use the term to cover various groupings of customers.

(a) Demographic segment
(b) Market
(c) People
(d) Buying power

3. is the act of obtaining desired object by offering something in return.

(a) Marketing Myopia
(b) Selling
(c) Exchange
(d) Delivery

4. Marketing management is .
a. managing the marketing
process
b. monitoring the profitability of the companies products and services
c. selecting target markets
d. the art and science of choosing target markets and getting, keeping, and growing customers
throughcreating, delivering, and communicating superior customer value.

5. At the heart of any marketing program is the —the firm’s tangible offering to the market.
a. service offer
b. product
c. sales support team
d. packaging
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6. Price determination of a product does not depend on which of the following factor?
(a) Product cost (b) demand
(c) utility of product (d) personal expenses

7. The concept of marketing mix was developed by:

(a) W. Anderson (c) Stanton

(b) Philip Kotler (d) N.H. Borden

8. Many people want BMW but only few are able to buy it. This is an example of:
(a) Need (b) Want (c) Demand (d) Status

Answers

Test Your Knowledge Questions

1. ( Grading) 2. (Promotion) 3. (Channels of Distribution) 4. (Market Planning)
5. (a. Selling and b. Marketing) 6. ( When large market is to be covered) 7. (MRP)
8. ( Public Relations)

Multiple Choice Questions

1. Ans (c) 2. Ans (b) 3. (c) 4.d 5.b. 6.d 7.b 8. C

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